Tuesday, February 27, 2007

Dow's Down...and Down...and...

It will undoubtedly take some time to sort all out, but it appears that today's near meltdown in the DJIA was a function of a computer glitch, as reported by the WSJ:

There was a temporary lag in calculation of the 30 large-stock average due to a surge in order flows as the market continued to tumble in afternoon trading, much like a clogged pipe. Just before 3 p.m., Dow Jones Indexes switched over to a backup system to calculate the average, which nearly instantly registered the huge move.

Jim Cramer blames ETFs. Perhaps this is just the new code word for "program trading", the alleged cause of the (in)famous 1987 meltdown.